Bharat Doshi, ED & Group CFO, Mahindra & Mahindra is cautious on Reserve Bank of India’s (RBI) final guidelines to allow licensing of new private sector banks. He told CNBC-TV18 in an interview that more clarity on the transition provisions is required.
He feels that RBI is not looking for many entrants, instead for some who are financially sound.
Below is the verbatim transcript of his interview to CNBC-TV18
Q: Tell us any of the sticky points that you would want further clarity on from the Reserve Bank of India?
A: The clarity on transition provisions for existing NBFC was very nice. The guidelines and the sentence, that existing NBFCs would be permitted to convert themselves to or alternately promote a bank. That is the option given. However, one would need more clarity on the transition provisions and how they would apply.
Q: As far as the net worth requirements are concerned and that eligibility criteria that has been put in place does that keep the net wide open or does it bar several entities from applying?
A: They are looking for people who are financially sound. They do not want many entrance of Rs 100 crore or Rs 50 crore, instead they want Rs 500 crore to come in. That is the expectation by RBI. That expectation is in a way becoming clearer, that somebody who is in it for a long run.